Vivo, BCCI sever ties for the upcoming IPL

The Board of Control for Cricket in India (BCCI) and Vivo Mobile India Pvt Limited have decided to suspend their partnership for the Indian Premier League 2020, BCCI and Vivo said in statements on Thursday.

For the past few days, the Chinese mobile maker Vivo was reportedly said to have pulled out as the sponsor for this year’s IPL after facing severe backlash due to the geopolitical tensions between India and China. Today’s statements by BCCI and Vivo is the first official confirmation of the same.

Vivo has been paying ₹440 crore a year to BCCI for the sponsorship rights.

“Vivo has chosen to pull out of the IPL this year given the negative sentiment around the Indo-China border standoff. Another factor that may have influenced their decision could be the overall business downturn and diminishing revenue due to the pandemic,” Lloyd Mathias, Business Strategist, who was closely involved with cricket sponsorship during his stint as EVP Marketing PepsiCo India, told BusinessLine. 

In the short run, Vivo and all other Chinese handset brands will be negatively impacted, but the long-term impact will need to be seen, said Mathias. “Going ahead with the IPL sponsorship may well have done them more harm than good, so lying low could well be a way out. I think once the tensions ease, consumers focus will shift back to the value purchases basis their affordability, and nationalistic sentiments will take a back seat,” he said. 

For brand Vivo, this is a break year or a hiatus year when ‘brand China’ takes a beating in India, said Harish Bijoor, Brand Guru & Founder, Harish Bijoor Consults Inc. “It’s only right that Vivo decides to sit out this year. Do remember that IPL2021 is not far away. If the April 2021 dates hold, we will, therefore, have an IPL not many months away. And that’s when Vivo might just be back,” he added.

New sponsor

Meanwhile, BCCI is now left to scout for a new sponsor, which would be riddled with difficulties amid the global pandemic and its impact on the economy. 

In a way, the Vivo pull out has worked for the BCCI who was facing flack for going ahead with a Chinese brand as the title sponsor of the IPL, said Mathias. “Now they can open up the IPL for a fresh sponsor though given the last minute they may have to take a haircut on the deal. BCCI’s other revenues from broadcaster STAR Network stays – even as other marquee global sporting events like the Olympics and Wimbledon have pulled back in 2020,” he explained. 

For BCCI, this is a “fire-sale moment”, while for the buyer of the title sponsorship, this is going to be a “good deal moment”, said Bijoor.